SentinelOne (S) is entering fiscal 2027 "on firmer ground" with a "generally encouraging" outlook as new AI-driven cybersecurity products gain traction, Morgan Stanley said Friday in a report.
With "more reasonable guidance," including expected margin upside, and Sonalee Parekh joining as the new chief financial officer, the company may outperform as the year progresses, the report said.
An industry conference in the spring may offer a "firmer sense of competitive positioning in AI" and provide a clearer read on the macro backdrop, both key to turning more positive on the stock, Morgan Stanley said.
Management guided for around 600 basis points of margin expansion in fiscal 2027, a meaningful step toward improving profitability, the report said.
Still, "management continues to embed some conservatism in the guide given evolving macro and geopolitical uncertainty, which could influence deal timing and sales cycles more broadly," the report said.
Morgan Stanley lowered its price target on SentinelOne stock to $17 from $18 and maintained its equal-weight rating.
Price: 13.95, Change: +0.17, Percent Change: +1.23
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